Railroad Companies Profiting In The Supply Chain Crisis

We are experiencing one of the greatest supply chain crises in the United States and one of the industries that is stepping up to fight the bottlenecks is the rail industry. The major freight carriers in the United States are fighting the good fight by increasing charges for stranded goods during a supply chain bottleneck, while lowering expenses. According to a left-leaning watchdog organization, these businesses have benefited from the current crisis.

The report suggested that In the first nine months of 2021, the seven major railways, which control about 40% of all freight in the United States, collected a staggering $1.18 billion in charges for stranded goods due to bottlenecks in supply chains.

It is important to note that these businesses are not the only ones struggling, as shippers are also being charged higher rates due to the current crisis. The silver lining is that, by and large, the rail industry is working hard to keep things moving despite the challenges.

Companies were using new methods to cope with the supply chain issues such as “precision scheduled railroading,” which involves streamlining schedules and cutting staff sizes and locomotive and car fleets. This allowed the businesses to cut their expenses while still providing an essential service.

While we are all anxious for the pandemic to end, it is important to remember that transportation businesses are struggling as well. The rail industry is just one example of the many businesses that have been forced to adapt in order to survive.

It is clear that the major freight carriers in the United States are benefiting from the current supply chain and it will be interesting to see how the situation develops in the coming months as the supply chain crisis continues to change. We could see further investments in freight rail based on the results!

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Post Author: Lailah Ford